Sharechat Logo

NZ dollar gains vs Aussie after weak business confidence, upbeat Orr sentiment

Tuesday 12th December 2017

Text too small?

The New Zealand gained against the Aussie after disappointing business confidence across the Tasman and extended its gains against the greenback on speculation Adrian Orr will make a more hawkish next governor of the Reserve Bank. 

The kiwi gained to 91.96 Australian cents as at 5pm in Wellington from  91.75 Australian cents as at 8am and  91.53 cents late yesterday. It was at 69.27 US cents as at 5pm in Wellington versus 68.86 cents late yesterday. 

The kiwi gained pushed higher against the Aussie after business confidence eased across the Tasman. National Australia Bank's index of business conditions fell 9 points to +12 in November, unwinding all of October's surprise spike.  The kiwi also continued to benefit from news that NZ Superannuation Fund chief Orr had been named RBNZ governor after a unanimous recommendation from the bank board.   

Ross Weston, a senior trader at Kiwibank, said the kiwi was "defying logic" as it should be moving in the other direction "in the shadow of the Fed," given the US  Federal Reserve is expected to hike US interest rates on Thursday morning New Zealand time.  He said the Aussie news may have spurred some investors to sell Aussie and buy kiwi.  Also, there "may just be a bit of a sting in the tail on this Orr news" as it has eliminated some uncertainty, he said. 

He noted it overlooked news that the Ministry for Primary Industries says four new properties have tested positive for the bacterial cattle disease Mycoplasma bovis, including the first outbreak in the North Island.  "It's taking a lot in its stride," he said. 

The trade-weighted index rose to 73.43 versus 72.96.

Looking ahead, he said markets will be focused on the Fed Thursday as well as monetary policy decision from both the  European Central Bank and Bank of England.  Domestically, the government's half-year economic and fiscal update and budget policy statement Thursday will be closely watched. 

The local currency advanced to 51.91 British pence from 51.40 pence and to 58.86 euro cents from 58.44 cents. It gained to 78.63 yen from 78.18 yen and rose to 4.5874 yuan from 4.5562 yuan.

New Zealand’s two-year swap rate fell 3 basis points to 2.12 percent and the 10-year swaps rose 6 basis points to 3.17 percent.

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar rises after heartening Chinese data
Suspect company faces liquidation after director dies
Foreign investors face maximum penalty for breach after $13M purchase
Napier Port share offer $2.27-$2.60; will raise net $110 million
Crucial carbon reduction recommendations due tomorrow
NZ Super Fund to invest in $300M local hotel venture
Infratil-backed Longroad Energy secures Texas wind farm finance
Peters to meet top US administration hawks in Washington
BNZ kyboshes AMP's A$3.3 bln life business sale
Tourist numbers dip in May on fewer Chinese, Indian arrivals

IRG See IRG research reports